Speculative dynamics of prices and volume

Using data on 50 million home sales from the last U.S. housing cycle, we document that much of variation in volume came rise and fall speculation. Cities with larger speculative booms have price booms, sharper increases unsold listings as market turns, more severe busts. We present a model which predictable endogenously attract short-term buyers than long-term buyers. Short-term amplify by selling faster destabilize prices through positive feedback. Our matches key aggregate patterns, including lead–lag price–volume relation sharp inventories.